South Bend Small Business Succession Plans


I remember when I owned my small manufacturing business, one of my greatest unknowns was how I could retire.  Most of the time, we think we own the business, but in some regards, it owns us.  Some, but few, businesses operate on auto-pilot whether the owner is there or not, but most smaller privately owned businesses, less than $5 million in revenue, depend on the owner checking in on the one extreme to being there every waking moment on the other extreme. 

Working with a business consultant at South Bend Business Brokers, I understood what I needed to change in my business.  The business revolved totally around me alone.  If I wasn't there, not much happened.  But, the enterprise value of the business suffered because no new prospective buyer would want to do what I do.  I had years of experience to know how to do what I do.  A new person coming into ownership would take 1-2 years to get to my level.  So the best thing I could do (1) for my own sanity and for (2) the value of the business, was to hire someone to take some of the load off me.  Buyers look for trained employees that they can depend on.  They want to know they can maintain, or grow, the business that is there now.   So, I took the plunge to hire an outside salesperson.  At first, you think about it as a cost. Some may think about it as investing in a cost for future ROI based on their efforts.  Hopefully, you hire a hunter, a rainmaker, that creates more value than they cost, from the get-go.  If you hire an account manager type person, that only services existing business, without adding new business, you better have a hunter to feed new business.  You'll pay a little more for the hunter, but it is well worth it. 

There is also a trend now in drop shipping.  I had similar sales channels thru online dealers.  They would sell the product retail online.  They had the audience, often by combining multiple lines into one site or on place.  Some of them had a retail store, but they still wouldn't carry inventory.  Think about the overhead of the inventory, but maybe worse, the double shipping cost from the manufacturer to the retail location.  Customers expect the retailer to eat that as part of their profit.  If the customer is picking up at the retail location, having inventory is more critical.  But if it's an online store only, you're shipping to the end customer.  If you can get the manufacturer to drop ship to each customer, you'll save the overall freight cost and often get the customer to pay for it.  Now, we're seeing more and more online stores, or e-commerce providers, selling online and they're taking a lower % profit in order to have a 3rd party wholesaler or the manufacturer drop ship each item.  You may even see someone almost mirror a manufacturer's site and taking only a 10-20% mark up. 

Eventually, I sold my business thru the business broker.  South Bend is a hot bed for manufacturing, machine shops, plastic injection molding companies, retailers, and more.  There is a lot of industry here in South Bend.  One guy told me a lot of start ups were created by a machinist getting laid off of some big company, or just wanting a side hustle, and setting up a mill in their garage or workshop at home.  Over the years, that grew into a decent business.  Hard working Americans with a dream want to acquire these businesses.  There is value in a profitable business, value that can be increased with coached properly.  My advice is to meet with a business coach, or better yet, a business broker that does coaching, and analyze your business.  There are a lot of consultants that go around the country and prey on business owners.  I would avoid those.  But, get with a business broker that has actually owned a business of their own.  Do a consulting agreement 2-3 years prior to wanting to sell your business.  They'll help you make it more valuable for when you decide to sell it.  Plus, they can help your sell your business when the time comes. 

Business Brokers are worth their cost, even though they are not cheap, if and only if, they bring something to the party.  Not all brokers are the same.  You can tell some brokers are just salespeople with little real world experience.  If you're in the South Bend area, even northern Indiana or southwestern Michigan, I would recommend South Bend Business Brokers.  Their number is 574-914-0076.  info@southbendbusinessbrokers.com    https://www.southbendbusinessbrokers.com

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